— Hemindra Hazari writes:

The Punjab National Bank (PNB) Nirav Modi scam has led to a clamour from certain quarters for the privatization of India’s Government banks. It was only to be expected that Assocham , the corporate sector body, saw in this development a chance to ask for the privatization of Government banks, since some of its members might be interested in buying some of them up at cut-rate prices. Arvind Subramanian, Chief Economic Adviser, who had earlier  argued for the closure of Government banks in order to allow private banks to increase their market share, has renewed his argument recently by asking, “first, if not now, when? second, if not this, what?”. Shekhar Gupta has made the astounding claim that India’s Government banks have a 47-year record of scams. Adi Godrej, chairman of the Godrej group, pitched in for privatization with an equally preposterous claim that “I have not  heard of any major scams by the private bank.(sic) There is always something going wrong in companies from time to time, but it’s always more controlled in the private sector  if at all and much better managed.” Ravi Venkatesan, the chairman of the Government-owned Bank of Baroda, no less, also contributed with “privatization of at least a few big banks is probably the only solution.” The nation is being warned that the fate that befell PNB will befall the entire Government banking sector, and private ownership is the only solution to provide sound management.

The underlying belief of the school of privatization of Government banks is that bank nationalization was a national folly in 1969, which bred managerial incompetence, moral hazard, a drain on the exchequer’s resources and crony capitalism. The protagonists of the privatization of Government banks fail to acknowledge the fact that before nationalization private sector banks were not reaching banking services to the agrarian sector and small industries, nor contributing to a more balanced development of the economy. They ignore the fact that the banking sector was rife with mismanagement: in the two decades before nationalization, 736 banks either failed or had to be taken over by other banks.  Continue Reading »


On February 13, the BEST, the undertaking which runs Mumbai’s public bus services, announced that it would now bring in private contractors to run BEST buses. The following joint statement was prepared before the February 13 announcement, but it remains relevant. The BEST’s decision to privatize has been taken under duress: the Municipal Corporation has refused to provide a grant to the BEST until it adopts its ‘reform’ package, the centrepiece of which is privatization. The statement counters the Corporation’s claim that the subsidy to BEST is unsustainable. — RUPE

 We condemn the fact that the budget for 2018-19 presented by the BMC does not provide for a grant for BEST  bus services. The BMC Commissioner is demanding that the BEST first implement his unilateral demands or ‘reform package’ that includes: (i) increase in fares, (ii) reduction of routes, (iii) partial privatisation (wet-leasing), (iv) reduction of workers’ emoluments (through freeze of D.A., cancellation of medical allowance, cancellation of welfare schemes for workers, etc), and (v) increased workload on officers. His argument is that the BMC cannot sustain financial support to BEST.

However, it should be noted that it is standard practice worldwide, and in every city of India, to subsidise public transport, in the interests of the whole city. Some cities, such as Paris and Seoul recently, have also taken steps to fight days of extreme air pollution by making public transport free of cost on those days. Continue Reading »

The lead headline in today’s Times of India is that Richard Branson, the British entrepreneur on whom Vijay Mallya modeled his goatee and lifestyle, has signed an intent agreement with the Maharashtra government to develop a hyperloop route between Pune Central, the proposed Navi Mumbai international airport and Mumbai.

The hyperloop is a new technology that moves passengers in capsules at near-sonic speeds. The Times provides us with colourful diagrams and informs us that it will reduce travel times from the present three hours to 20 minutes. Branson says the system will have a capacity of 150 million passengers a year. Branson’s US-based Virgin Hyperloop One (VHO) says the Pune-Mumbai route could result in $55 billion (Rs 3.5 lakh crore) in “socio-economic savings (time savings, emissions cuts, accident reduction, operational cost savings, etc) over 30 years”.

The name of the firm is quite apt, as Virgin Hyperloop has not yet set up a hyperloop anywhere in the world. Indeed the technology is not yet commercially operational anywhere in the world. Branson confides that “Possibly India may have this track as the first operationalized route, though Dubai is competing close”. The project is claimed to cost a mere Rs 20,000 crore, about one-fifth the projected cost of the Prime Minister’s favourite project, the Mumbai-Ahmedabad bullet train, for about one-fifth the distance.[1] As such, it is sure to enthuse the state government, anxious to procure its own white elephant. Like the Prime Minister’s pet, it will be an expensive thing to feed: the Times passingly mentions that “The fare is too early to decide, but will probably be close to airfares.” Presumably passengers will be persuaded to board it with the help of subsidies, a small price to pay for having the world’s first commercial hyperloop. Continue Reading »

The current discussion regarding Aadhaar, both in the Supreme Court as well as in the media, has focussed on the questions of privacy, State surveillance of individuals, and the security of data. All these are valid objections, and any one of these would be sufficient ground to oppose such a system. However, to limit the discussion to these aspects misses the crucial point. Namely, that Aadhaar is intended as an instrument of control not of a small minority, but of the vast majority. It does this indirectly.

Supporters of the official line mock fears of Aadhaar as the worries of a tiny segment (one particularly puerile piece attributed opposition to Aadhaar to “activists of the upper crust, upper class, wine ‘n cheese, Netflix-watching social media elite – mostly of the Left”). The poor, they claim, have no objection, since they are not worried about their privacy; and at any rate why would the Government try to monitor 134 crore citizens? They would only monitor a handful of them, who can be monitored even without Aadhaar. Thus runs the argument. Continue Reading »

The following interview with Fred Engst was conducted by Onurcan Ülker on April 7, 2017, at Beijing. It provides very significant insights into the building of socialism in China on the basis of both direct experience and deep reflection on the questions involved. — RUPE

Onurcan Ülker: Could you please start with introducing yourself?

Fred Engst (Yang Heping): I was born in Beijing in 1952 and raised in China’s ancient capital, Xi’an. I came back to Beijing when our family got transferred in 1966, before the Cultural Revolution started. I spent first twenty some years of my life in China—mostly in Xi’an—and the last eight years of that time was in Beijing during the peak of the Cultural Revolution; but Beijing was not as chaotic as other places at that time. After the middle school, I spent five years working in a factory together with my classmates. Some other classmates of mine went to the countryside and I also wanted to go with them, but I was not allowed because I was a foreigner. Later, after I tried, my brother and sister were able to go. Then I went to the U.S. in 1974 and spent another thirty some years there. But I came back often: I spent the whole year here in 1988 right before the events in Beijing in 1989. Then I spent another year, 2000, to teach here. In between, I also came back quite often to see my parents and my classmates. In the end, I decided to move back to China in 2007. Since then I’ve been teaching and doing my research here. My lifelong pursuit is understanding politics and economics of Mao’s period. In this sense, I can say it has been most fruitful in last ten years.

Fred Engst

Fred Engst

The real question: How to build a new, socialist society?

OÜ: So, you spent quite a lot of time in Maoist China. Western critics of Maoism usually accuse it of over-politicizing the people and therefore, consistently undermining stability and institutionalization. How was the daily life of ordinary people in Maoist China? Did the so-called “over-politicization” of masses really create a sort of chaos?

FE: Well, that is a loaded question. It comes down to: do you justify the oppression or do you try to overcome the oppression? In other words, the problem is: do you want to overthrow the old oppressors to become a new oppressor or completely eliminate the system of oppression?

Continue Reading »

The survey report and article we publish below is significant in that it has been carried out, not by a Government agency, academic institution or private firm, but by an agricultural labourers’ organisation. Indeed, the surveyors were members of agricultural labour households of the very villages they surveyed.

The article points out that, while there is much discussion about the debt of the landed peasantry, there is a paucity of even information about the debt of landless agricultural labourers (largely Dalit). The organisation, Punjab Khet Mazdoor Union, has consequently carried out its own survey of agricultural labourers in 10 villages of Punjab’s Malwa region and two villages in the Doaba region. Among the facts of particular interest that emerge from the survey: 

(1) 84 per cent of the agricultural labour families surveyed were in debt, with an average debt of over Rs 91,000 per family.

(2) Interest rates on most of this debt ranged from 18 to 60 per cent per annum.

(3) The share of banks and cooperative societies in these households’ debt was only 16 per cent; indeed, the share of public sector banks was negligible.

(4) Nearly 30 per cent of the debt was extended by landowning farmers of different size categories (half of this amount came from those owning more than 10 acres).

(5) Private moneylenders accounted for almost one-fourth of the debt, charging usurious rates.

(5) A significant new finding is that microfinance agencies too accounted for almost one-fourth of the loans, charging interest rates as usurious as those of moneylenders. The authors of the article have commented on this new phenomenon in the latter half of the piece.


[Download tables and Hindi version of survey]


Continue Reading »

Available now in PDF format is a Hindi translation of Aspects of India’s Economy No.s 66-67: India’s Peasantry Under Neoliberal Rule. The original journal may be accessed at www.rupe-india.org.

The translation is done by the Karwan Collective, which may be contacted at karwancollective(at)gmail.com.

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